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Indian ETFs Fall on Widespread Corporate Reform; Plunging Rupee

  +Follow August 16, 2013 4:13PM
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Investors in the emerging market of India were rocked Friday, as the country plans to concomitantly rework their outdated 57-year-old corporate legislative laws and address a rapidly devaluing currency. 

India has long been plagued by corruption. Kickbacks, gift and outright fraud are commonplace, as unscrupulous players take advantage of a financial system that has failed to keep pace with an increasingly complex global economy.

In 2009, the country was rocked by a massive fraud case involving the company Satyram Computer Services. The chairman confessed to overstating company assets and earnings by over $1 billion. The scandal, often called "India's Enron," made it clear the country lacked a proper oversight body and laws sophisticated enough to deal with modern finance.

The country is simultaneously scrambling to also stabilize the rupee, which is the worst performing emerging market currency in comparison to the dollar. The Reserve Bank of India is taking action and imposing controls to increase overseas direct investments, as the diminishing value of the country’s currency has made it more difficult for Indian corporations to buy assets outside the country.

India has also had to deal with inflation and a widening current account deficit. The corporate reforms and worsening economy coupled to spook investors and trigger an ETF sell-off.

Indian ETFs across the board retreated on Aug. 16. iPath MSCI India Index (INDA) dropped 4.84 percent to hit $21.41 a share. PowerShares India ($PIN) dropped 4.64 percent to hit $15.62 a share. WisdomTree India Earnings ($EPI) fell 4.53 percent to hit $14.76 a share.

The biggest loser on the day was Direxion Daily India Bull 3X Shares ($INDL), which plummeted 12.89 percent to hit $10.72 a share amid eight times normal volume. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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Results for PIN
Evener Investment
1 Sep 14 10:24:43
RT @SeekingAlpha: India: The Economic Cycle Turns And The Sensex Bull Rages Onwards http://t.co/Mt71dbTo6Y $EPI $SCIF $INDY $PIN $INDL $INP…
Seeking Alpha
1 Sep 14 10:23:27
India: The Economic Cycle Turns And The Sensex Bull Rages Onwards http://t.co/Mt71dbTo6Y $EPI $SCIF $INDY $PIN $INDL $INP $INXX $INDA
30 Aug 14 03:01:50
weekly system long in order of gains (137% down to -9%) $GPRE $SLXP $TRN $PIN $FB $QQQ $TLT $IYR $VGT $PGJ $CELG $VPL $IDTI $PRXL $TWM
Lil $tunt✈️
28 Aug 14 22:11:37
$pin my Life chasin ca$h
28 Aug 14 16:05:58
The Bullish Case For The #India Stock Market $INDA $SCIF $EPI $PIN #indianstocks #indiastockmarket #indianstockmarket http://t.co/QRfricPArA
تعارف بلاك بيري
27 Aug 14 08:36:55
#تعارف_بلاك_بيري $PIN: 2B91BDF2: ممكن وووافده من العين مابا موطنات http://t.co/IECljYvFv5 #الامارات #السعودية
Invest Up
25 Aug 14 14:14:36
We currently have a bullish bias on the India index (ETFs: $EPI $PIN $INXX). Target gain 28.49%. Please retweet. http://t.co/OQuEOxsE8Z
  +Follow August 16, 2013 4:13PM



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